Ahead of the Curve

The lending environment is undergoing a worrying change. Funds that European direct lenders have raised but not yet deployed are at an all-time high and banks in most Western-European jurisdictions have renewed lending following years of reticence after the global financial crisis, leading to increased competition amongst lenders in the small and medium enterprise (SME) market.

Corus take-over leaves pensions fund position unclear

GLOBAL - As Anglo-Dutch steelmaker Corus confirmed the £6.2bn (€9.3bn) take-over by India's Tata Steel, it remains unclear how much will be injected into the Corus pension scheme in the UK.

Kirsty Williams, the Welsh Liberal Democrat spokeswoman for Enterprise, Innovation and Networks was quoted as saying today: "There is an urgent need for clarity and reassurance for the [Corus] workers."

She demanded a "commitment that the workers' pension fund continues to be properly resourced", adding that she would ask the Enterprise Minister at the Welsh Assembly to make a statement on the issues as soon as possible.

However, so far today no such commitment came from Tata, which will become the world's fifth biggest steelmaker following the deal.

A Tata spokesperson in London was adamant that the revised offer requires new discussion with the pension fund's trustees.

"We will engage in the next few days with the trustees of the pension fund to have a constructive discussion," he told IPE, adding, "The £126m was agreed with the trustees for that [previous] offer, and the revised offer requires another conversation which we will have over the next few days."

He declined to make any further comments on how much would be poured into the pension scheme. Corus declined to comment on whether it would lobby for better terms.

In December last year, Tata's rival, Companhia Siderurgica Nacional (CSN), trumped the earlier Tata bid by offering £4.9bn - with more cash on the table for the Corus Engineering Steels Pension Scheme. CSN said it would fund upfront the IAS19 deficit on the scheme with an injection of £138m.

Nonetheless, Tata beat CSN early this morning with the winning £6.2bn bid during an auction process introduced by the UK Takeover Panel and branded as by commentators "unusual".

This morning, Corus chief executive Philippe Varin has ruled out any job cutbacks among its 24,000 employees in Rotherham, Scunthorpe and Port Talbot.